Lakers forward Metta World Peace will play out the final year of his contract. / Kirby Lee, USA TODAY Sports

by Sam Amick, USA TODAY Sports

by Sam Amick, USA TODAY Sports

According to a person with knowledge of the situation, the veteran small forward will play out the final year of his contract (worth $7.7 million) rather than exercise the early termination option on his deal. The person spoke to USA TODAY Sports on the condition of anonymity because the decision had not yet been made public.

World Peace had until Tuesday to make his decision, and the lack of clarity that surrounded him in Laker Land made his process all the more problematic. Lakers center and free-agent-to-be Dwight Howard has still not indicated whether he will re-sign or head elsewhere, and World Peace had considered opting out in order to become a free agent rather than take part in these unstable Lakers times.

But while signs remain that Howard may be heading to the Houston Rockets, World Peace is better off opting for the security that comes with the final year of his deal rather than opting out. At 33 years old and 14 seasons into his career, the player formerly known as Ron Artest saw his offensive production rise in his first year under Lakers coach Mike D'Antoni (from 7.7 points and 7.3 shots per game in 2011-12 to 12.4 points and 11 shots per game last season).

The Lakers, whose payroll was set to be approximately $80 million for the coming season with just eight players (and without Howard), now will have to decide whether they want to use their amnesty clause on World Peace's deal in order to limit the exorbitant price of their underachieving team. The league's new luxury tax system is about to reach its most-punitive stages, meaning the Lakers could be in for record costs.

The amnesty provision is a one-time measure that teams can use which takes a player's contract off the books for salary cap purposes, though the player is still paid in full. The provision can only be used on contracts that were signed before the new collective bargaining agreement was put in place in December 2011.

World Peace came to the Lakers as a free agent in 2009 and was a key part of their championship team that season. After having surgery to repair a torn meniscus in his left knee late last season, he made a remarkable recovery and played just 12 days later. His return helped the Lakers make their playoff push, but he struggled in three games against the San Antonio Spurs during a first-round sweep.